Oil Falls a Second Day on U.S. Stockpiles, China Imports

April 10 (Bloomberg) -- Oil dropped for a second day in New
York as a decline in China’s fuel imports and speculation that
U.S. crude stockpiles rose to the highest in 22 years raised
concern of slowing global demand.

Futures slid as much as 0.8 percent. U.S. inventories
probably increased 2 million barrels to 364.4 million last week,
the most for this time of year since 1990, according to a
Bloomberg News survey before an Energy Department report
tomorrow. China’s net crude imports fell 6 percent in March and
overseas purchases of all goods missed economists’ estimates,
customs data showed. The two nations are the world’s biggest oil
consumers. Prices have gained this year on worry that tension
with Iran will disrupt global supplies.

“We are now between winter and summer with relatively low
demand and high refinery maintenance,” Bjarne Schieldrop, Oslo-based chief commodity analyst at SEB AB, said today in an e-mailed response. Given the previous two weeks’ increases in U.S.
stockpiles, “the market is likely to be cautious on the bull
side with concern that we could see yet another strong rise
tomorrow.”

Oil for May delivery fell as much as 75 cents to $101.69 a
barrel in electronic trading on the New York Mercantile Exchange
and was at $102.07 at 1:16 p.m. London time. The contract
declined 85 cents yesterday to $102.46, the lowest close since
April 4. Prices are up 3.5 percent this year.

Brent crude for May settlement dropped $1.18, or 1 percent,
to $121.49 a barrel on the London-based ICE Futures Europe
exchange. The European benchmark contract’s premium to New York-traded West Texas Intermediate was $19.51, compared with $20.21
yesterday.

China Imports

China cut net crude imports in March before refineries
start maintenance this quarter. Purchases fell to 5.52 million
barrels a day from February’s record 5.87 million, according to
Bloomberg calculations based on data released today on the
website of the Beijing-based General Administration of Customs.

China also reported a 5.3 percent increase in inbound
shipments of all goods in March compared with a year earlier.
That lagged behind the median estimate of 9 percent in a
separate Bloomberg survey and 40 percent growth in February,
indicating that domestic demand in the economy is slowing.

Fuel Stockpiles

U.S. gasoline supplies dropped 1.25 million barrels last
week, according to the median estimate of nine analysts surveyed
by Bloomberg News before the Energy Department report.
Inventories of distillates, a category that includes diesel and
heating oil, were unchanged at 135.9 million, the survey showed.

The American Petroleum Institute will release separate
inventory data today. The API collects stockpile information on
a voluntary basis from operators of refineries, bulk terminals
and pipelines. The government requires that reports be filed
with the Energy Department for its weekly survey.

Oil slid yesterday after an April 6 Labor Department report
that showed the U.S. created 120,000 jobs in March, missing the
lowest forecast in a Bloomberg News survey of economists and
compared with a median estimate of 205,000.

Prices also dropped before negotiations between Iran and
the United Nations Security Council members plus Germany resumed
on April 14. The talks may ease concern that global crude
supplies will be disrupted by a dispute over Iran’s nuclear
program. The Islamic republic has threatened to close the Strait
of Hormuz, a transit route for a fifth of the world’s oil, in
response to a U.S. and European embargo.

Kuwait Petroleum Corp. is considering alternative ways of
exporting petroleum if the waterway is closed, including
transporting oil to the United Arab Emirates, Chief Executive
Officer Farouk al-Zanki said yesterday.

Oil’s decline in New York may slow as prices near technical
support along its 100-day moving average around $101.62 a barrel
today, according to data compiled by Bloomberg. Futures
yesterday dropped below this indicator before settling above it.